Would it be smart t...
 

Would it be smart to take out a loan to invest in bitcoin?  

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BettingDiscipline
(@bettingdiscipline)
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Joined: 5 years ago
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07/02/2018 1:36 am  

You think bitcoin can profit to beat the interest accrued in a loan? Run some numbers by me 🙂


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Allsopp
(@mma)
Member Admin
Joined: 6 years ago
Posts: 3215
08/02/2018 6:27 pm  

Because I own this website I have to add a disclaimer when answering posts like this...

I am not a financial advisor and this is not financial advice. This is my opinion and these thoughts are based on my own personal experience and feelings. I don't recommend you take my advice, but this is how I feel about your question.

Posted by: BettingDiscipline

You think bitcoin can profit to beat the interest accrued in a loan? Run some numbers by me 🙂

I've read a lot of investment books and they all say the same thing...

You can never predict what will happen in any market. Anyone that says otherwise is either lieing to you or lieing to themselves.

Here is a funny scene from Wolf of Wall Street that sums up the truth about all markets:

Ray Dalio is one of the most successful investors of all time and he always refers to markets as gambling. He will use the word betting regularly when talking about trading different stocks, equities, commodities and assets. The same now applies to Crypto.

Will Bitcoin go to zero in the next few years? Probably not. But it's definitely possible. Anything is possible. 

Having this mindset is a really important part of any investment. You have to become comfortable with losing and weigh up whether the risk is worth the reward. I am committing quite heavily to Crypto at the moment. Substantial amounts of money. I am comfortable with losing it all because I believe the risk is worth the reward. Not everyone feels that way. In fact, I think most people would think I am crazy. But I earn a living from gambling, so I am definitely much less risk adverse than most people, especially when it comes to money.

So why am I so committed to Crypto?

I believe that Crypto will change the world in immeasurable ways. I believe that some of the Crypto based technologies we can buy into right now will become the future Amazon's and Google's. Despite this strong opinion, I also know that Crypto could fail and all of these technologies could be worth nothing. 

A long time ago I kickstarted my betting bankroll with a £10,000 loan. Looking back, it was massively beneficial for me and changed my life but at the time is was also a massive risk. 

Before you do something like this you need to decide what your goals are and come up with a plan. You need to decide if this is something you are serious about.

What will you do if it goes well? What will you do if it goes bad? 

Are you committed enough, smart enough and patient enough to allocate time each day to research and stay in tune with the market. Are you prepared to become obsessed with the Crypto market? Because that's what it takes to make money in anything.

This is a zero sum game. It is the game of moving money from strong hands, to weak hands. The market will try to break you mentally. The patient, thoughtful and calculated will be rewarded. The impulsive, impatient and greedy will get killed. This is how markets work and unfortunately 90% of people do not have the mentality to be successful in them, just like 90% of people do not have what it takes to be successful at gambling. 

Most people thought I was crazy for taking out a £10,000 loan to gamble with because at the time I was broke and that was a huge amount of money to me. But in my mind I was consistently making good profits from betting £5 - £10 per fight, so why would it be any different betting £50 - £100?  I saw this loan as an investment in my future. I saw it in the same way that someone else would see a business loan that they could use to create a new business.

People take out loans all the time to create businesses. Some of them succeed and have life changing success. Others fail, learn from their mistakes and try something else, eventually these people will probably become successful at something because they have determination, drive and a growth mindset. Other people fail and this failure ends up defining them to the point that they never become successful and never take anymore risks. Unfortunately this is what happens to most people. It is the reason why most people buy Bitcoin at £17,000 - £20,000... Then panic sell it at £10,000 - £13,000, then fomo back in at £15,000 - £17,000... They get into a never ending cycle of being on the wrong side of the smart money, until they fail to learn from their mistakes and quit. 

Before you think about doing this I would recommend reading this book by Ray Dalio:

http://amzn.to/2EaNfzr

It will help you appreciate what it takes to be successful in any market. Then ask yourself some honest questions. Can you handle it?

Say you buy $10,000 worth of Bitcoin today and tomorrow it drops to $5000. What would you do? If it's at $2000 after a month, what would you do?

Be honest with yourself. If this is something you're passionate about and you want to dedicate a big part of your life to it and you are determined to succeed, I would say go for it.

Back when I took out that £10,000 loan I was destitute. Dead broke with a wife and a 2 year old baby to support. I didn't even have enough money back then to buy food, gas or electricity. Our shit would get cut off every month because we always fell behind on bills. Back then I was so determined to change my circumstances that I knew that I would be able to use that £10,000 to dig myself out of a hole because failure was not an option. I would not recommend anyone do a similar thing unless you have a similar level of drive and determination. 

If you are thinking of doing this to try and earn a quick buck I would recommend you do not do this because I think in the end it will end badly. If this is something you are passionate about, then go for it.

 

 


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BettingDiscipline
(@bettingdiscipline)
Featherweight Champion
Joined: 5 years ago
Posts: 578
14/02/2018 3:13 am  

Thanks for sharing your story Allsop.

I'm thinking of taking a personal loan that gets paid off in 10 years. I don't mind if it goes south because I can afford to lose the entire amount in 1o years. But of course, nobody wants to go to 0 lol.

Having said that, what crypto would you suggest to buy that explodes in 5-10 years? Basically something to invest in the long term, what do you suggest? Feel free to PM me if you'd rather chat in private. Thanks.

PS - If there are any investments non-crypto I'm all ears.


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mds1303
(@mds1303)
White Belt Customer
Joined: 8 months ago
Posts: 2
26/03/2019 5:34 pm  
Posted by: BettingDiscipline

Thanks for sharing your story Allsop.

I'm thinking of taking a personal loan that gets paid off in 10 years. I don't mind if it goes south because I can afford to lose the entire amount in 1o years. But of course, nobody wants to go to 0 lol.

Having said that, what crypto would you suggest to buy that explodes in 5-10 years? Basically something to invest in the long term, what do you suggest? Feel free to PM me if you'd rather chat in private. Thanks.

PS - If there are any investments non-crypto I'm all ears.

I would say if you are thinking/asking which crypto will explode in 5-10 years, aka long term, you would be better off just pouring the monthly payments (that you would be going into the loan repayment) into crypto. If it is an uncollatoralized loan you probably aren't going to get a very good rate so that is a lot of money being wasted on interest. Unless you truly fear you are going to miss this explosion in the next few years, and have more than just a hunch to go off of, it just doesn't seem worth it IMO to go into debt. And as you are slowly building up your stake in crypto you can use the time to learn more about it and get a feel for which ones you think will be the most lucrative.

Just my 2 cents, but best of luck!!

Also, I second the Ray Dalio book recommendation and would add to it Benjamin Graham's Intelligent Investor (one of Warren Buffet's mentor)

 

 

 


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